IBN launches financial literacy campaign

IBN launches financial literacy campaign

The programme is aimed at ensuring that residents who received compensation from SJVN Arun III Hydropower Project will use it properly and not spend it recklessly

Nov 23, 2016- Investment Board Nepal (IBN) has launched a financial literacy campaign in Sankhuwasabha district for locals receiving compensation payments from SJVN Arun III Hydropower Project. The board said it started the programme to ensure that residents who received money from the developer would use it properly and not spend it recklessly. Landowners displaced by the 900 MW hydropower project will be receiving a total of Rs870 million for their properties. The board has prepared a 90-minute video documentary which residents have to watch before they can get their cheques. It came up with this idea after suspecting that locals might blow the money on alcohol and gambling.

The documentary is based on the lives of the people who received compensation payment for their land acquired by the Kulekhani Hydropower Project in 1985. “A majority of the people who received compensation are presently living in Makwanpur district,” said an IBN source. “Some of the recipients managed their money properly and they are currently living well in fine homes and their children are getting a good education while those who spent their money recklessly are living on the streets.” The documentary has included both types of stories. “Locals receiving compensation from the developer of the project have said that they have benefitted from the campaign,” said the source. IBN has urged the recipients to deposit their money in the formal financial system and invest it in income generating enterprises. The board has made it mandatory for recipients to open a joint bank account with their spouse so that women will also have a say while deciding how to utilize the money.

Currently, 158 households have received compensation totalling Rs690 million and another 138 households are set to receive compensation of Rs180 million. IBN expects to finish distributing compensation payments within a week. The Arun III project is expected to cost $1.4 billion and produce 900 MW of electricity. The district administration has marked 49 hectares of private land required for the project. The properties have been divided into five categories for the purpose of determining the compensation amount -- sloping land, small farmland, large cardamom field, paddy field and residential land. The compensation amounts for the different types of land varies accordingly. In all four affected VDCs, the administration has offered Rs825,000 per ropani for sloping land and Rs907,500 per ropani for small farmland. It will pay Rs1.04 million per ropani for large cardamom fields and Rs1.2 million per ropani for paddy fields. If the land touches the North-South Koshi Highway, the owner will get 20 percent more. The compensation determination committee has considered 200 square metres of residential land as a parcel of land, and has offered Rs1.1 million in compensation.

The rate is slightly higher for residential land at Faxinda of Num, where the office has offered Rs1.23 million in compensation for a parcel measuring 200 square metres. The project developer will also acquire houses, cowsheds, huts and plants on those land plots, and the District Administration Office has fixed the compensation amount for all the assets on the land. The affected people will also receive transportation and food security costs including other social benefits. The project will acquire 391 private land parcels, including 112 in Diding, 82 in Yaphu, 147 in Num and 50 in Pathibhara VDCs. As per an agreement signed between IBN and the project developer SJVN in November 2014, the company will complete the construction of the plant and start energy generation by 2021. Nepal will receive Rs348 billion over 25 years from the project. SJVN will provide 21.9 percent of the energy generated free of cost, which is worth Rs155 billion, plus another Rs107 billion in royalties, according to IBN.